Development & Aid, Economy & Trade, Global, Global Geopolitics, Global Governance, Headlines

TRADE: “Developed Countries Should Contribute the Most”

Interview with Argentine trade negotiator Néstor Stancanelli

GENEVA, Jun 6 2008 (IPS) - Tension in the World Trade Organisation (WTO) negotiations on industrial goods reached such an extreme that the diplomat leading the talks on cutting tariffs, Canadian ambassador Don Stephenson, decided this week to suspend the discussions.

Negotiators from industrialised nations blame the tension on the members of the NAMA-11 group of developing countries – Argentina, Brazil, Egypt, India, Indonesia, Namibia, the Philippines, South Africa, Tunisia and Venezuela – accusing them of trying to undermine the multilateral trade system.

But “we want just the opposite of that,” said the Argentine Foreign Ministry’s director of international economic negotiations, Néstor Stancanelli. “For Argentina, one of the priorities is a strong multilateral system, and we are clearly working towards that.”

The WTO sees liberalisation of trade in industrial products, known as non-agricultural market access (NAMA), as one of the pillars, along with agriculture, of the Doha Round of multilateral trade talks launched in late 2001 in the capital of Qatar.

In an interview with IPS correspondent Gustavo Capdevila, Stancanelli explained that the problem of negotiations on industrial goods undoubtedly boils down to a “divergence in positions. Our position differs from that of the main industrialised countries, and Argentina’s stance is shared by the countries of the NAMA-11 group. The situation is different in agriculture.”

IPS: How are these disparities reflected?

NÉSTOR STANCANELLI: They can be illustrated by means of statistics. The main developed countries – the United States, the European Union countries, Japan – would cut their industrial tariffs, according to the coefficients proposed by the chair of the negotiating committee, by approximately 37 to 44 or 45 percent. And for developing countries, according to the proposed coefficients, including flexibilities, the cuts would range between 49 or 50 to 58 percent.

IPS: And why are these different reductions unacceptable?

NS: The mandate for these talks establishes that they must be governed by the principle of less than full reciprocity in favour of developing countries. That means developing nations should cut their industrial tariffs less than developed nations.

As we can see, what we have here is less than full reciprocity, but the other way around – that is, in favour of industrialised countries. So, the question is to discuss these issues in the negotiations, because it is the countries with the highest level of development that should contribute the most.

IPS: Is that principle legally binding?

NS: Less than full reciprocity is contained in the Doha Round mandate, was ratified in the framework pact approved by the WTO in July 2004, and appears in the mandate for the sixth ministerial conference in Hong Kong, in 2005.

The Hong Kong conference also produced paragraph 24, which says a comparably high level of ambition should be achieved in market access for agriculture and NAMA.

IPS: Has this principle of comparably high level of ambition been fulfilled?

NS: Look at what we have so far. In agriculture, what is on the table, according to the draft presented by the chair, are cuts of approximately 50 or 51 percent for developed countries. And these, in turn, are modified by a number of provisions in favour of industrialised nations. That is, first they have the possibility of sensitive products, subject to smaller tariff cuts. And then they have pressured against a tariff ceiling.

On this point, developing countries have asked for industrial tariffs not to exceed 100 percent. To give an idea, Switzerland has 400 agricultural items to which tariffs of over 100 percent apply. And around four percent of the European Union tariff lines, which number around 100, are above 96 percent.

IPS: And in the case of developing countries?

NS: To give an idea, in NAMA-11, we have positions where the highest tariffs for sensitive products would not exceed 26 percent, and the average would be approximately 16 percent.

And that is what the “big” countries say is not a significant contribution. So one thing is preached on one hand, while something else entirely is done on the other, when it comes to making a contribution.

Thus, our position is totally reasonable, because we want equal treatment for agriculture and NAMA, as established by the Hong Kong ministerial declaration. But, as we can see, it is not equal.

IPS: Is this the cause of the current tension in the talks?

NS: That is what is being discussed. I don’t think there’s anything surprising about it, because it’s a trade negotiation. Our obligation as officials is to defend the interests of Argentina and its agricultural and industrial sectors. To the extent that we get reasonable contributions from the other side, we will present the same ourselves. We have already offered this.

IPS: Nor is Argentina satisfied by the increase in flexibilities of the last draft accord presented by Stephenson?

NS: No, for one reason: the statistics I am giving include the facilities. That is, with the flexibilities and according to the coefficients presented by the chair, we would be cutting our tariffs far more than the industrialised countries.

So here we have a few things that must clearly be differentiated. Special and favourable treatment for developing countries takes into account flexibilities to reduce to a lesser extent or exclude that reduction in a certain quantity of tariff lines that are considered sensitive.

IPS: What industrial sectors are you referring to?

NS: Normally, the sensitive products are the ones that would be affected the most by a cut in tariffs. For example, in Argentina that would include textiles, toys, automobile parts and chemical inputs. So, what the mandate indicates is that there should be flexibilities for developing countries.

IPS: What response have the NAMA-11 initiatives received?

NS: That is precisely what is lacking on the drawing board. Stephenson’s draft has never reflected NAMA-11 proposals. It has reflected other proposals, which makes it imbalanced. That is the reason for the failure to reach agreement in the talks.

Those who were able to listen to the debate in the NAMA committee’s last session, on Monday, saw that there are many countries that questioned the draft.

IPS: How can this problem be overcome?

NS: Well, we have to work to get the draft modified, and reach a balanced solution that is satisfactory to all. In earlier rounds, the linear tariff cut formula [reducing tariffs by an equal percentage across the entire class of products] was used, which is equivalent to an average. The Swiss formula [a mathematical formula designed to cut and harmonise tariff rates] is more harmful.

IPS: What would that mean for Argentina, Brazil, Paraguay and Uruguay, the four full members of the Mercosur (Southern Common Market)?

NS: When we’re talking about reductions, we are referring to consolidated tariffs, the ones the WTO is concerned with. Because the ones applied by Argentina or by Mercosur as a whole are below that general range.

That means the reduction of consolidated tariffs in a proposal like the one set forth by NAMA-11, which is between 40 and 43 percent for developing countries, means that economies like those of the Mercosur trade bloc will preserve a limited space, but a space nonetheless, which we need to implement industrial policies.

IPS: Would that proposal refute the accusations that NAMA-11 and the developing countries at large are weakening the Doha talks and the multilateral system itself?

NS: As in any negotiating process, they are nothing to be alarmed about. Obviously these are debating strategies, attempts to pin the blame on some countries for the lack of progress made. But the ones who are really responsible for the stalemate are those who are making many demands and few contributions.

And it is up to those countries to offer substantial elements in order for us to have a true ‘development round’ of talks. So far, that hasn’t happened, but we hope it will.

 
Republish | | Print |

Related Tags



osho books